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If the debt follies in Washington result in US credit being downgraded, it could end up being a worse financial hit than the epic failure of Lehman Brothers, writes Neel Kashkari. The former assistant secretary to the Treasury, who was appointed by George W Bush to oversee the $700 billion bank bailout, notes the harsh lessons of 2008 and breaks down the similarities and differences between then and now in the Washington Post:

Too safe to fail? Pre-2008, everyone "generally believed that major US investment banks were so large they would never be allowed to fail." But since US Treasurys have been the "risk-free" gold standard for decades, "a far bigger shock" than Lehman could occur.

How much money are we talking? With a whopping $14 trillion, US Treasurys are "the single biggest security market in the global economy." Lehman, in comparison, was worth $600 billion—less than 5% of that.

Will we actually default? Probably not. "But a small deviation from a cherished belief can be as shocking as a large deviation from a weaker belief."

Kashkari points to differences in the economic climates of 2008 and the present, but says a "US downgrade has the potential to be as bad or perhaps worse than the Lehman shock." We may be sure of only one thing: "There is no upside to finding out." Click for Kashkari's entire column.

Thank you so much you moronic teabaggers who let yourselves be let astray by the selfish, shortsighted, privileged super minority. And thank you so much President Obama for not engaging in the debate until it was too late.

passinthru1

Jul 30, 2011 12:58 PM CDT

In this game of chicken, Obama and Congress are both thinking they'll come out looking good. Fact is, I want them all out, the whole lot of the Executive AND Legislative branch, Democrats and Republicans alike. Throw 'em all out the next election. Start fresh with a new group and pass a law that none of them get paid and none of them can draw down on their own pricey Congressional/Executive branch benefits until a financial plan is put in place.

CHRiSTFELD

Jul 30, 2011 12:23 PM CDT

If the Earth were to crash into the sun and burn, it would make Obama look really bad---and that's all that really matters.